SBTi draft standard for climate commitments

The Science Based Targets initiative (SBTi) has released a 132-page draft proposing significant revisions to its Corporate Net-Zero Standard, aiming to provide companies with more flexibility in achieving net-zero emissions. Key changes include mandatory Scope 3 emissions targets for large companies (over $450 million in revenue), focusing on emissions-intensive activities contributing at least 1% of Scope 3 emissions or over 10,000 metric tons of CO₂ annually. The draft also suggests eliminating fixed percentage requirements for Scope 3 targets, allowing companies to concentrate on categories accounting for at least 5% of their Scope 3 footprint. Additionally, firms would be expected to influence their direct suppliers to establish net-zero targets and could adopt various strategies, such as procuring materials from suppliers committed to reducing production emissions. Another notable proposal is the potential integration of “high-integrity” carbon removal activities to address residual emissions. The draft outlines three pathways for incorporating carbon removals into corporate net-zero strategies, emphasizing their use as a last resort for emissions that cannot be eliminated. These proposed updates are open for public consultation until June 1, with SBTi seeking feedback through expert working groups and an online survey. The final revisions are expected to be approved by the end of 2025, potentially influencing corporate climate strategies and the voluntary carbon market. https://lnkd.in/e5ixw3nZ

I've compressed the 133-page SBTi 2.0 framework into the 9 critical changes that will determine which companies survive the transition. Most sustainability leaders won't make it through the entire document. But mastering these shifts now will position you ahead while others scramble: 1️⃣ Scope separation is mandatory. Version 2.0 eliminates combined Scope 1, 2, and 3 targets, forcing you to address each separately. No more hiding poor performance in one area behind strong results in another. Your CFO will need to sign off on each distinct reduction pathway. 2️⃣ Third-party assurance requirements are stratified. Category A companies (large, developed markets) now need formal verification of base year emissions from accredited bodies. This means sustainability data must meet the same scrutiny as financial reporting. 3️⃣ Net-zero commitments must align with UN HLEG recommendations. Generic pledges are no longer acceptable. Your board now needs to approve specific language on value chain emissions, limited use of offsets, and phasing out fossil fuels. 4️⃣ Two-tier company categorization creates regional fairness. Different requirements for Category A (developed economies) versus Category B (emerging markets) companies recognize varying starting points. But all roads lead to the same verification standards. 5️⃣ Progress assessment has specific mathematical formulas. SBTi will calculate your progress using defined equations, not narrative reports. Your actual reductions will be compared to expected linear progress from base year to target year. 6️⃣ Implementation disclosure is no longer optional. Version 2.0 demands explicit transition plans showing how you'll achieve targets, including capital allocation plans, technology deployment timelines, and policy engagement strategies. 7️⃣ IPCC AR6 pathways replace AR5. The updated pathways reflect more stringent reduction requirements based on latest climate science, meaning your previously approved targets may become obsolete. 8️⃣ Boundary requirements shift from percentage coverage to material sources. Instead of covering arbitrary percentages of emissions, you must address your most relevant sources with detailed requirements for using both absolute and intensity metrics. 9️⃣ Renewal validation introduces rolling targets. When your current target period ends, you must undergo renewal validation and set new targets. There's no resting on past achievements. Most companies have been operating in a world of sustainability theater - setting targets without the systems to verify, track, and prove progress. SBTi 2.0 transforms climate action from vague commitments into a rigorous compliance function with mathematical validation requirements. The companies that will thrive are those already treating carbon like currency - carefully counted, verified, and managed.

Science-based target iniative is significantly changing What are the key changes? -more focus on Scope 3 emissions -steps towards harmonisation across standards -better scientific alignment with the IPCC reports -clearer definition of quality of carbon credits as an abatement mechanism The Science Based Targets Initiative has announced a significant update to its Corporate Net-Zero Standard, scheduled for implementation in 2025. This revision, prompted by stakeholder feedback and industry challenges, aims to align with the latest climate science and best practices, provide new guidance for Scope 3 targets, offer tools for assessing progress, and clarify how other standards interact with the Net-Zero Standard. Interim deliverables, such as research reports and discussion papers, will be shared with a focus on environmental attribute certificates and carbon offsets. Corporations are encouraged to provide feedback during the public consultation period, with the aim of creating a more robust and effective sustainability framework. What are the ways businesses can contribute to the changes in the standard? -Provide Feedback: Participate in providing feedback on the revision process, ensuring your voice is heard in shaping the future of corporate sustainability standards. -Engage in Interim Deliverables: Take part in discussions and reviews of interim deliverables, such as research reports and discussion papers, to stay informed and contribute to the ongoing dialogue. -Prepare for Changes: Anticipate adjustments to align with the latest climate science and best practices, including updates on Scope 3 targets and guidance on assessing and reporting progress. -Collaborate for Harmonisation: Recognize the importance of harmonizing with other standards and organizations in the sustainability ecosystem, contributing to a unified approach towards net-zero objectives. Read more here: https://lnkd.in/dENqEdtm #sbti #sustainability #corporatesustainaability #esg #decarbonisation #esg